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B1 Segment information | 12 Months Ended
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Dec. 31, 2024
Disclosure of operating segments [abstract] |
B1 Segment information | Segment information Segments When determining Ericsson’s operating segments, consideration has been given to the financial reporting reviewed by the Chief Operating Decision Maker (CODM). Markets and what type of customers the products and services aim to attract have been considered, as well as the distribution channels they are sold through. Commonality regarding technology, research and development has also been taken into account. To best reflect the business focus, three operating segments are presented:
– | Networks
– | Cloud Software and Services
– | Enterprise.
Segment Networks offers hardware and software solutions and related services, enabling communications service providers to evolve to new 5G capabilities. The portfolio includes Radio Access Network (RAN), RAN Compute, Transport, Antenna products and a complete service portfolio. 82% (82% in both 2023 and 2022) of the IPR licensing revenues are reported as part of segment Networks. Segment Cloud Software and Services provides solutions that equip communications service providers to enhance their business agility, service experience, and operational efficiency. The portfolio includes Core Networks, Business and Operations Support Systems, Network Management, Cognitive Network Solutions and Managed Network Services. 18% (18% in both 2023 and 2022) of the IPR licensing revenues are reported as part of segment Cloud Software and Services. Segment Enterprise provides advanced connectivity solutions for businesses to accelerate digitalization, drive innovation and optimize processes. The portfolio includes Global Communications Platform, Wireless Wide-Area Networks (WWAN) and private cellular networks. Other comprises media businesses as well as other non-allocated businesses, including RedBee Media. Segment-level information has also been presented for Other. Market areas The market areas are the Company’s primary sales channel with the responsibility to sell and deliver Mobile Networks customer solutions. The Company operates worldwide and reports its operations divided into five geographical market areas:
– | North America
– | Europe and Latin America
– | South East Asia, Oceania and India
– | North East Asia
– | Middle East and Africa.
Segment Enterprise has a multi-channel go-to-market distribution model. Sales from segment Enterprise and Other, and the IPR licensing revenues are externally reported as market area Other. Major customers The Company derives most of its sales from large, multi-year agreements with a limited number of significant customers. Out of a customer base of more than 500 customers, mainly consisting of communications service providers, the 10 largest customers accounted for 44% (43% in 2023 and 50% in 2022) of net sales. These customers were reported under segments Networks and Cloud Software and Services. The largest customer accounted for approximately 13% (8% in 2023 and 14% in 2022) and the second largest customer accounted for 8% (7% in 2023 and 10% in 2022) of net sales. Segment information 2024
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  | Group/Total segments |
Segment sales |  |  | 158,207 |  |  |  | 62,635 |  |  |  | 24,863 |  |  |  | 2,175 |  |  |  | 247,880 |
Net sales |  |  | 158,207 |  |  |  | 62,635 |  |  |  | 24,863 |  |  |  | 2,175 |  |  |  | 247,880 |
Gross income |  |  | 73,648 |  |  |  | 23,021 |  |  |  | 12,788 |  |  |  | –92 |  |  |  | 109,365 |
Gross margin (%) |  |  | 46.6% |  |  |  | 36.8% |  |  |  | 51.4% |  |  |  | –4.2% |  |  |  | 44.1% |
Earnings (loss) before financial items and income tax (EBIT) 1)2) |  |  | 25,665 |  |  |  | –435 |  |  |  | –22,083 |  |  |  | 1,166 |  |  |  | 4,313 |
EBIT margin (%) |  |  | 16.2% |  |  |  | –0.7% |  |  |  | –88.8% |  |  |  | 53.6% |  |  |  | 1.7% |
Financial income and expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –1,724 |
Income after financial items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,589 |
Income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –2,215 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 374 |
Other segment items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share in earnings of associated companies |  |  | 94 |  |  |  | 2 |  |  |  | – |  |  |  | –342 |  |  |  | –246 |
Amortizations |  |  | –1,288 |  |  |  | –30 |  |  |  | –2,661 |  |  |  | –1 |  |  |  | –3,980 |
Depreciations |  |  | –4,187 |  |  |  | –1,381 |  |  |  | –274 |  |  |  | –198 |  |  |  | –6,040 |
Impairment losses 1) |  |  | –305 |  |  |  | –87 |  |  |  | –15,308 |  |  |  | –14 |  |  |  | –15,714 |
Restructuring charges |  |  | –1,899 |  |  |  | –2,434 |  |  |  | –511 |  |  |  | –168 |  |  |  | –5,012 |
Gains/losses on investments and sale of operations |  |  | –7 |  |  |  | 10 |  |  |  | –165 |  |  |  | 17 |  |  |  | –145 |
1) Segment Enterprise includes impairment of goodwill and intangible assets of SEK –15.3 billion, mainly related to the acquisition of Vonage in 2022. For more information, see note C1 “Intangible assets.” 2) Segment Other includes a gain of SEK 1.9 billion from the resolution of a commercial dispute, see note B4 “Other operating income and expenses.” Segment information 2023
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Group/Total segments |
Segment sales |  |  | 171,442 |  |  |  | 63,630 |  |  |  | 25,745 |  |  |  | 2,534 |  |  |  |  |  | 263,351 |
Net sales |  |  | 171,442 |  |  |  | 63,630 |  |  |  | 25,745 |  |  |  | 2,534 |  |  |  |  |  | 263,351 |
Gross income |  |  | 67,959 |  |  |  | 22,088 |  |  |  | 12,016 |  |  |  | –461 |  |  |  |  |  | 101,602 |
Gross margin (%) |  |  | 39.6% |  |  |  | 34.7% |  |  |  | 46.7% |  |  |  | –18.2% |  |  |  |  |  | 38.6% |
Earnings (loss) before financial items and income tax (EBIT) 1) |  |  | 19,382 |  |  |  | –220 |  |  |  | –38,336 |  |  |  | –1,152 |  |  |  |  |  | –20,326 |
EBIT margin (%) |  |  | 11.3% |  |  |  | –0.3% |  |  |  | –148.9% |  |  |  | –45.5% |  |  |  |  |  | –7.7% |
Financial income and expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –2,993 |
Income (loss) after financial items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –23,319 |
Income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –2,785 |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –26,104 |
Other segment items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share in earnings of associated companies |  |  | 83 |  |  |  | 41 |  |  |  | – |  |  |  | – |  |  |  |  |  | 124 |
Amortizations |  |  | –1,013 |  |  |  | –43 |  |  |  | –3,401 |  |  |  | –1 |  |  |  |  |  | –4,458 |
Depreciations |  |  | –4,460 |  |  |  | –1,470 |  |  |  | –274 |  |  |  | –495 |  |  |  |  |  | –6,699 |
Impairment losses 1) |  |  | –527 |  |  |  | –176 |  |  |  | –31,952 |  |  |  | –77 |  |  |  |  |  | –32,732 |
Restructuring charges |  |  | –4,437 |  |  |  | –1,924 |  |  |  | –173 |  |  |  | 13 |  |  |  |  |  | –6,521 |
Gains/losses on investments and sale of operations |  |  | –24 |  |  |  | –39 |  |  |  | –16 |  |  |  | –206 |  |  |  |  |  | –285 |
1) Segment Enterprise includes impairment of goodwill of SEK –31.9 billion related to the acquisition of Vonage. For more information, see note C1 “Intangible assets.” |
Segment information 2022 |
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Group/Total segments |
Segment sales |  |  | 193,468 |  |  |  | 60,524 |  |  |  | 14,597 |  |  |  | 2,957 |  |  |  |  |  | 271,546 |
Net sales |  |  | 193,468 |  |  |  | 60,524 |  |  |  | 14,597 |  |  |  | 2,957 |  |  |  |  |  | 271,546 |
Gross income |  |  | 86,368 |  |  |  | 20,106 |  |  |  | 7,096 |  |  |  | –275 |  |  |  |  |  | 113,295 |
Gross margin (%) |  |  | 44.6% |  |  |  | 33.2% |  |  |  | 48.6% |  |  |  | –9.3% |  |  |  |  |  | 41.7% |
Earnings (loss) before financial items and income tax (EBIT) 1) |  |  | 38,512 |  |  |  | –1,689 |  |  |  | –4,473 |  |  |  | –5,330 |  |  |  |  |  | 27,020 |
EBIT margin (%) |  |  | 19.9% |  |  |  | –2.8% |  |  |  | –30.6% |  |  |  | –180.3% |  |  |  |  |  | 10.0% |
Financial income and expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –2,411 |
Income after financial items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 24,609 |
Income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | –5,497 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 19,112 |
Other segment items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share in earnings of associated companies |  |  | 30 |  |  |  | 27 |  |  |  | – |  |  |  | –40 |  |  |  |  |  | 17 |
Amortizations |  |  | –1,424 |  |  |  | –122 |  |  |  | –2,019 |  |  |  | –12 |  |  |  |  |  | –3,577 |
Depreciations |  |  | –4,073 |  |  |  | –1,792 |  |  |  | –515 |  |  |  | –185 |  |  |  |  |  | –6,565 |
Impairment losses |  |  | –211 |  |  |  | –91 |  |  |  | –87 |  |  |  | –12 |  |  |  |  |  | –401 |
Restructuring charges |  |  | –146 |  |  |  | –96 |  |  |  | –65 |  |  |  | –92 |  |  |  |  |  | –399 |
Gains/losses on investments and sale of operations |  |  | 253 |  |  |  | – |  |  |  | 111 |  |  |  | –108 |  |  |  |  |  | 256 |
1) | Segment Other includes a provision of SEK –2.3 billion related to the DPA breach resolution with the US Department of Justice, including expenses for the extended monitorship, and by SEK –1.0 billion due to charges related to the divestment of IoT and other portfolio adjustments.
Products and Services by Segments
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Total |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Products |  |  | 121,814 |  |  |  | 22,409 |  |  |  | 5,927 |  |  |  | – |  |  |  |  |  | 150,150 |
Services |  |  | 36,393 |  |  |  | 40,226 |  |  |  | 18,936 |  |  |  | 2,175 |  |  |  |  |  | 97,730 |
Total |  |  | 158,207 |  |  |  | 62,635 |  |  |  | 24,863 |  |  |  | 2,175 |  |  |  |  |  | 247,880 |
2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pro d ucts |  |  | 131,393 |  |  |  | 21,672 |  |  |  | 5,704 |  |  |  | –4 |  |  |  |  |  | 158,765 |
Services |  |  | 40,049 |  |  |  | 41,958 |  |  |  | 20,041 |  |  |  | 2,538 |  |  |  |  |  | 104,586 |
Total |  |  | 171,442 |  |  |  | 63,630 |  |  |  | 25,745 |  |  |  | 2,534 |  |  |  |  |  | 263,351 |
2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Products |  |  | 147,997 |  |  |  | 21,105 |  |  |  | 4,923 |  |  |  | –1 |  |  |  |  |  | 174,024 |
Services |  |  | 45,471 |  |  |  | 39,419 |  |  |  | 9,674 |  |  |  | 2,958 |  |  |  |  |  | 97,522 |
Total |  |  | 193,468 |  |  |  | 60,524 |  |  |  | 14,597 |  |  |  | 2,957 |  |  |  |  |  | 271,546 |
Market area 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Net sales |  |  | Non-current assets 5) |
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Total |  |  | Total |
North America 1) |  |  | 57,875 |  |  |  | 14,326 |  |  |  | 598 |  |  |  | 87 |  |  |  |  |  | 72,886 |  |  |  | 18,223 |
Europe and Latin America 2) |  |  | 40,855 |  |  |  | 22,271 |  |  |  | 284 |  |  |  | – |  |  |  |  |  | 63,410 |  |  |  | 66,765 |
South East Asia, Oceania and India 3) |  |  | 23,259 |  |  |  | 9,114 |  |  |  | 37 |  |  |  | – |  |  |  |  |  | 32,410 |  |  |  | 1,005 |
North East Asia 4) |  |  | 14,477 |  |  |  | 4,142 |  |  |  | 18 |  |  |  | 124 |  |  |  |  |  | 18,761 |  |  |  | 1,374 |
Middle East and Africa |  |  | 10,344 |  |  |  | 9,761 |  |  |  | 678 |  |  |  | –12 |  |  |  |  |  | 20,771 |  |  |  | 173 |
Other 1) 2) 3) 4) 6) |  |  | 11,397 |  |  |  | 3,021 |  |  |  | 23,248 |  |  |  | 1,976 |  |  |  |  |  | 39,642 |  |  |  | – |
Total |  |  | 158,207 |  |  |  | 62,635 |  |  |  | 24,863 |  |  |  | 2,175 |  |  |  |  |  | 247,880 |  |  |  | 87,540 |
1) of which in the United States 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 98,265 |  |  |  | 17,175 |
2) of which in EU 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35,264 |  |  |  | 62,126 |
of which in Sweden 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,341 |  |  |  | 61,065 |
3) of which in India 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15,194 |  |  |  | 569 |
4) of which in Japan 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 9,072 |  |  |  | 199 |
4) of which in China 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,221 |  |  |  | 1,007 |
5) | Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.
6) | Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer.
| Other sales are attributed to countries based on the destination of products or services delivered.
Market area 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Net sales |  |  | Non-current assets 5) |
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Total |  |  | Total |
North America 1) |  |  | 44,640 |  |  |  | 14,199 |  |  |  | 266 |  |  |  | 125 |  |  |  |  |  | 59,230 |  |  |  | 33,214 |
Europe and Latin America 2) |  |  | 42,298 |  |  |  | 22,270 |  |  |  | 245 |  |  |  | 71 |  |  |  |  |  | 64,884 |  |  |  | 64,497 |
South East Asia, Oceania and India 3) |  |  | 43,235 |  |  |  | 10,038 |  |  |  | 36 |  |  |  | 9 |  |  |  |  |  | 53,318 |  |  |  | 886 |
North East Asia 4) |  |  | 18,986 |  |  |  | 4,720 |  |  |  | 37 |  |  |  | 189 |  |  |  |  |  | 23,932 |  |  |  | 1,775 |
Middle East and Africa |  |  | 12,902 |  |  |  | 10,457 |  |  |  | 378 |  |  |  | 2 |  |  |  |  |  | 23,739 |  |  |  | 174 |
Other 1) 2) 3) 4) 6) |  |  | 9,381 |  |  |  | 1,946 |  |  |  | 24,783 |  |  |  | 2,138 |  |  |  |  |  | 38,248 |  |  |  | – |
Total |  |  | 171,442 |  |  |  | 63,630 |  |  |  | 25,745 |  |  |  | 2,534 |  |  |  |  |  | 263,351 |  |  |  | 100,546 |
1) of which in the United States 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 85,313 |  |  |  | 32,133 |
2) of which in EU 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 34,257 |  |  |  | 59,456 |
of which in Sweden 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,774 |  |  |  | 58,728 |
3) of which in India 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 31,205 |  |  |  | 535 |
4) of which in Japan 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,139 |  |  |  | 132 |
4) of which in China 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,716 |  |  |  | 1,449 |
5) | Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.
6) | Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer.
| Other sales are attributed to countries based on the destination of products or services delivered.
Market area 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Net sales |  |  | Non-current assets 5) |
|  | Networks |  |  | Cloud Software and Services |  |  | Enterprise |  |  | Other |  |  |  |  | Total |  |  | Total |
North America 1) |  |  | 81,917 |  |  |  | 13,362 |  |  |  | 47 |  |  |  | 68 |  |  |  |  |  | 95,394 |  |  |  | 41,065 |
Europe and Latin America 2) |  |  | 44,644 |  |  |  | 21,638 |  |  |  | 99 |  |  |  | 409 |  |  |  |  |  | 66,790 |  |  |  | 93,612 |
South East Asia, Oceania and India 3) |  |  | 23,695 |  |  |  | 9,179 |  |  |  | 17 |  |  |  | 60 |  |  |  |  |  | 32,951 |  |  |  | 999 |
North East Asia 4) |  |  | 22,488 |  |  |  | 4,015 |  |  |  | 8 |  |  |  | 222 |  |  |  |  |  | 26,733 |  |  |  | 3,385 |
Middle East and Africa |  |  | 11,707 |  |  |  | 10,472 |  |  |  | 368 |  |  |  | 24 |  |  |  |  |  | 22,571 |  |  |  | –804 |
Other 1) 2) 3) 4) 6) |  |  | 9,017 |  |  |  | 1,858 |  |  |  | 14,058 |  |  |  | 2,174 |  |  |  |  |  | 27,107 |  |  |  | – |
Total |  |  | 193,468 |  |  |  | 60,524 |  |  |  | 14,597 |  |  |  | 2,957 |  |  |  |  |  | 271,546 |  |  |  | 138,257 |
1) of which in the United States 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 109,709 |  |  |  | 39,906 |
2) of which in EU 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35,859 |  |  |  | 92,167 |
of which in Sweden 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,239 |  |  |  | 88,057 |
3) of which in India 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,957 |  |  |  | 519 |
4) of which in Japan 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 9,965 |  |  |  | 187 |
4) of which in China 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,523 |  |  |  | 2,068 |
5) | Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.
6) | Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer. Other sales are attributed to countries based on the destination of products or services delivered.

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